Industries with the highest AI spend will be banking, retail, and discrete manufacturing, accounting for 39% of total spending.

The report found that healthcare remains an attractive market for AI. Many hospitals are piloting projects and are increasing investments in AI-enabled diagnosis and treatment systems which will support a 38% increase in spending across the health sector over the next five years.

Investments in AI overall are largely being driven by customer experience and digital transformation, with companies using intelligent approaches to scale production and processes.

Product recommendation is expected to be one of the three fastest-growing uses by 2023, as retailers move away from traditional product recommendation and adopt customer-centric intelligent approaches to gather insight into customers and provide personalised recommendations.

The report estimates that more than half of AI spend by 2023 will be driven by the UK, Germany, and France.

The rest of Western Europe (including Austria, Belgium, Denmark, Finland, Greece, Ireland, the Netherlands, Norway, Portugal, Sweden, and Switzerland) will be responsible for a further third of the spending.

However Italy and Spain only account for a small portion of the continent’s AI spend.

Central and Eastern Europe (CEE) has a relatively small market share in terms of AI spending within Europe as a whole (6.5% in 2018) but its organisations are increasingly adopting AI as it becomes a key part of their digital transformation.

In this area the biggest spenders for AI systems are banking and manufacturing and the main AI projects in finance involve automation of customer service, fraud protection, and optimisation of processes.

The report notes that perception of blockchain in the European market is moving away from being that it is only a cryptocurrency tool and a financial-only technology.

Blockchain originated in the banking industry, and this industry still accounts for 31% of total spending in 2019 with cross-border payments and trade finance the fastest-growing banking uses.

However manufacturing, professional services, retail, and banking show the greatest promise in their future investment in blockchain while it is also becoming important to the logistics industry.

Carla La Croce, senior research analyst, customer insights and analysis at IDC, said: “This is something that can be used by the transportation industry to track shipments, by top-quality luxury goods retailers to track provenance, or by real-estate professionals for transparent property management.”

Challenges to uptake include the lack of rules and regulations and getting small producers of goods, like farmers and fishermen, to use the platforms.